How can the private and public sectors work better together?
Implementing M4P interventions in the health sector in Nigeria brings together market actors from the public and private sector. The public sector, which regulates health care across the country, provides policies and regulations to all actors in the sector. In addition to its role as market regulator, the public sector also doubles as a “market player” through health care delivery.
This dual role has led to policy fluctuations and activities such as healthcare subsidies and free distribution of health commodities (mosquito nets, test kits) which often distorts the private health market for the private sector. Subsidies and freebies are not entirely bad, if their introduction and implementation are aimed at addressing identified market constraints for a pre-determined period. However, the long-term sustainability of the policies and the exit strategy of such subsidies are always hazy and tend to create a long-term market distortion that is difficult to correct.
SuNMaP's experience
The commercial sector arm of the Support to National Malaria Programme (SuNMaP) implemented interventions aimed at reducing the burden of malaria in Nigeria through market development interventions aimed at increasing access to malaria commodities (LLIN, RDT & ACT) through private channels where 60 percent of the people seek care. The public sector arm of SuNMaP alongside other activities with the National Malaria Programme, supported the distribution of free commodities in Nigeria.
In the past, different approaches (such as free net distribution, indoor residual spraying, larviciding etc.) have been used to address the malaria prevention burden. However, the Long Lasting Insecticidal Nets (LLIN) is thought to be the most cost-effective malaria prevention tool. The public sector has traditionally being the main funding recipient for LLIN interventions. Donors partner with the federal and state malaria agencies in an attempt to align all their activities to achieve maximum impact.
The thinking behind the donor partnership is to use the free distribution to prime the market and create a net culture among the people before the entrance of the private sector. While the private sector focused interventions took place, the federal and state government malaria agencies (with support from various malaria stakeholders) continued their free net distribution exercises despite earlier priming the market. Continuity was expected; the scale was not. These distribution exercises were mostly targeted at the most vulnerable groups in society; pregnant women and children under the age of five years. On other occasions, there were mass house to house distribution exercises for all classes of consumers aimed at increasing the LLIN coverage levels by giving every household two pieces of LLIN each. The free distribution created some market distortions which later impacted the outcome of private sector interventions. Distortions came in the form of retailers sourcing freely distributed nets for sale at a tenth of the standard retail price and consumers being unwilling to purchase the commodity due to their expectation of the freely distributed nets.
The lack of harmonization of activities and communication among stakeholders in the malaria space allowed various partners to carry out activities without considering their effects on other partners’ activities and their effect on the overall malaria target of the country. For instance, while some partners distributed for free, some sold at rock bottom prices well below the distributor’s landing cost due to the source of the nets and still others aimed at selling at the full price.
Preferred formula
For the public sector and private markets to work alongside each other without creating distortions for the other, there is a need for a clear demarcation of their activities and these activities should be effectively communicated to all parties.
There is a need to define the purpose and timeline of subsidized public sector goods and services to enable the private sector to manage potential distortions accordingly. The harmonization of activities of all stakeholders, whether private or public, needs to be done at the top level and then cascaded down to the lower levels with all partners being carried along through the process. Increased empowerment and activity of the private sector without a defined private sector role or policy from the public sector side will create overlaps in market activities, which will adversely affect private market sustainability in the long run.
The public sector needs to be well educated on the presence and activities of the private sector. The private sector needs to engage with the public sector more. Increasing the numbers of private sector activities through public sector driven initiatives keeps both sectors in the loop of health markets strengthening while creating clear boundaries of activities and preventing market distortions.
Do you have any insights to share on how market development programmes can better manage their engagement with the public sector?
Kabir is a market development specialist with experience in the Nigerian healthcare and agriculture sectors. He was the senior intervention manager at the DFID-funded SuNMaP. He currently works on strengthening health and agricultural systems in post-insurgency regions in Nigeria.
Busuyi has experience designing and managing market development interventions in Nigeria. He has worked on a number of M4P projects in the Nigerian agricultural, health and education sectors. He currently leads the Agri-business portfolio of the GEMS 4 project; a flagship project funded by DFID and the World Bank, working on improving the competitiveness of the Nigeria wholesale and retail sector.
Add your comment
Sign up or log in to comment and contribute.
Sign up